Raising My Capital by Taking a Bank Loan

Based on my current cash inflow capacity, in one year I can have my PhP100,000.00 if I do a diligent and consistent saving. However, I can also have that PhP100K in just one week. How? Bank loan.

Yes, I have considered taking a bank loan. I need a capital and this is the fastest way I can have it.

Diving into a debt is not a bad thing. I believe this an excellent strategy as far as capitalization is concerned. Business-minded people call it leveraging. Bank loan is a good leverage provided of course the loan proceeds is to be used to fuel or start a business. Loan is not good if it is to be used to buy stuffs that have no immediate income-generating capacity.

I will take a bank loan for the main purpose of starting my new sideline or pagkakitaan. I am planning to setup a small business or commercial space in front of our house which will be for rent or lease. A beauty shop or a barber shop space is what I have in my head. This could give me a monthly passive income when someone rents it. Other part of the loan will be used in renovating my already rented space (computer shop) in order for me to make a higher demand on the rent.

The other part of the loan, which is just a small portion of it, will be used to finance in full or pay my existing small debts. This will make me concentrate on a single loan and will stop me dealing with several loans and loan interests. The current bank interest is at lowest level (thanks to BSP historically low policy rates). This means I can take leverage at a lesser cost.

Debt is good if done for the foremost purpose of acquiring more of money. But not if the foremost purpose is only to make that ugly neighbor jealous over a new huge LED TV display.